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Presidential candidate Yang pledges loot box and crypto regulation


Democratic Presidential hopeful Andrew Yang has pledged to introduce regulations to tackle fraud in the cryptocurrency market, as well as regulations governing loot boxes and free-to-play games if he is elected. 

In a wide-ranging series of proposals for regulating technology businesses, Yang said the government must be forward-thinking and informed on the latest technological developments, to ensure regulations can keep pace with innovation.

“We shouldn’t stifle innovation, but we also shouldn’t let it outpace our ability to regulate it,” he said.

Currently, he said, there was a lack of understanding of new technology at the highest levels of the US government. 

“It’s embarrassing to see the ignorance some members of Congress display when talking about technology, and anyone who watched Congress question Mark Zuckerberg is well aware of this,” Yang said. 

“Without a base level of understanding, it’s unreasonable to expect proper regulation of major tech companies, or the drafting of legislation that addresses the critical technological issues that we’ll continue to face in artificial intelligence and cybersecurity.”

Andrew Yang

He said issues surrounding cryptocurrencies and video game loot boxes exemplified this lack of understanding.

“Both are areas that many legislators are blind to, or completely unprepared to understand the technical aspects of,” Yang explained. “This is creating an unregulated marketplace in both areas.”

For cryptocurrencies, the lack of regulation was leading to rising fraud, with other, more tech-savvy countries currently taking the lead on developing regulations, he said. Without a national regulatory framework, several federal agencies were butting heads over which held jurisdiction over them. 

These different departments have differing views on what digital assets actually constitute, whether they are property, commodities or securities. 

Yang therefore aims to re-establish the Office of Technology Assessment, a government body that conducted research on new technology before being shuttered in 1995, and establish a federal Department of Technology. 

This would be tasked with setting new standards and metrics for antitrust, while platforms would be held to a set of uniform standards. 

Yang also aims to promote legislation to provide legal certainty for the cryptocurrency and digital asset market space by defining what a token is, and when it is should be considered a security. He would also define which federal bodies have regulatory power over each element of the sector, and develop a consumer protection framework.

His government would also clarify the tax implications of owning, selling and trading digital assets, he added.

Loot boxes, on the other hand, were causing children to spend more time and money playing video games, with parents barely aware of the in-game mechanic, he explained. He aims to regulate the gambling-style mechanism, to prevent over-purchasing and to increase transparency as to what is being received, and its value. 

For free-to-play games that generate revenue via loot boxes, Yang would look to ensure that these do not exploit child psychology for profit, and have every in-game purchase require adult approval before being processed.

“In short, our government’s knowledge of technology and ability to regulate it and the market is being outpaced by innovation,” Yang said in conclusion. 

“We need a new generation of leadership that understands these new and emerging technologies so that proper frameworks can be developed to protect consumers and ensure innovation and competition.”

Yang has previously weighed into the debate over federal regulation for online poker, speaking out in favour of nationwide legislation, which he said would raise funding for problem gambling treatment.